Correct me if I'm wrong, but raising the debt limit ceiling is to allow for the government to pay for what it has already bought.You can cut up your credit card, but you still have to pay the bill; as it were.

columbia wrote:Correct me if I'm wrong, but raising the debt limit ceiling is to allow for the government to pay for what it has already bought.You can cut up your credit card, but you still have to pay the bill; as it were.

Correct, but if you don't print the money and pay those bills, ain't no body gong to do bid-ness wit you again.

columbia wrote:Correct me if I'm wrong, but raising the debt limit ceiling is to allow for the government to pay for what it has already bought.You can cut up your credit card, but you still have to pay the bill; as it were.

Correct, but if you don't print the money and pay those bills, ain't no body gong to do bid-ness wit you again.

Speaking of bid-ness. I don't know if it was posted here, but how about China surpassing the US, well, not just that, but totally reversing numbers, for international trade.

In just five years, China has surpassed the United States as a trading partner for much of the world, including U.S. allies such as South Korea and Australia, according to an Associated Press analysis of trade data. As recently as 2006, the U.S. was the larger trading partner for 127 countries, versus just 70 for China. By last year the two had clearly traded places: 124 countries for China, 76 for the U.S.

I don't think America is "done", but I think we've reached a point where we're going to stagnate or regress while many other countries rise up to near equal footing. The US was built on manufacturing. No matter who's President or who's in congress or what they do to taxes, health care, etc. we're never going to compete in manufacturing on a global scale again. We simply cannot keep up with dirt cheap labor.

The US needs to evolve out of manufacturing, but what's "next"? We don't need millions more college educated, white collar workers. Businesses are becoming smarter and thriving with smaller, more efficient work forces. Our main problem, imho, is that there are too many people in this country.

The United States Supreme Court granted cert today for the cases Hollingsworth v. Perry and United States v. Windsor. Those two cases deal, respectively, with the constitutionality of California’s Proposition 8 and the federal Defense of Marriage Act.

Hockeynut! wrote:I don't think America is "done", but I think we've reached a point where we're going to stagnate or regress while many other countries rise up to near equal footing. The US was built on manufacturing. No matter who's President or who's in congress or what they do to taxes, health care, etc. we're never going to compete in manufacturing on a global scale again. We simply cannot keep up with dirt cheap labor.

The US needs to evolve out of manufacturing, but what's "next"? We don't need millions more college educated, white collar workers. Businesses are becoming smarter and thriving with smaller, more efficient work forces. Our main problem, imho, is that there are too many people in this country.

I think this is a fairly naive viewpoint. The US wasn't built on manufacturing, it was built on innovation in the leading sectors, which at the time of our rise was manufacturing. We're still the global leader in innovating in most sectors.

In fact, we're losing in manufacturing because poor countries can replicate our systems. But they can't innovate like we do---they don't even make research and development a priority, often conditioning contracts in their country on us telling them our secrets.

Most of that innovation isn't the type of innovation that will create millions of jobs. And if it does, those jobs will mostly go overseas. Look at Apple. They're one of the most innovative companies in the world (or at least take credit for inventing everything), but their "blue collar" jobs are almost all taken out of the country.

Pretty much every type of physical good can be made at a lower cost in China/Indonesia/India, etc. The US has millions upon millions of low skilled workers who used to be able to make a good living in manufacturing. Those types of jobs are rapidly going away. Where are all of those workers going to go? I think it's naive to think that the US has any type of industry currently or in the pipeline that will provide millions of jobs those kind of family sustaining jobs within the next decade or two.

ExPatriatePen wrote:So if I refuse to raise the credit limit, neither of us can spend foolishly????

Sounds like a pretty fine solution to me.

No.

If you refuse to raise the limit:- The U.S. economy grinds to a halt (albeit from not a very high speed) as the billions of dollars spent by the government every day stops flowing;- Stock markets will explode. Literally explode;- International markets will begin to collapse;- Interest rates skyrocket as U.S. credit is downgraded (again);- The government possibly defaults on its debt obligations;

And since the government spends far more than it takes in, not raising the debt means as-near-as-instantaneous cut in government spending of between 40% and 45%. Sure, a big cut in spending is desirable...... but that level of cut - overnight, no less - would lead pretty much immediately to a recession. And such a marked reduction would likely bring about a contraction in the overall economy of upwards of 1.5%.

Remember -- the U.S. credit rating was downgraded in large part because of the uncertainty surrounding the debt ceiling discussion last summer. The worry was that we would not pay our bills, not that we were running up too many of them.

Shyster wrote:The United States Supreme Court granted cert today for the cases Hollingsworth v. Perry and United States v. Windsor. Those two cases deal, respectively, with the constitutionality of California’s Proposition 8 and the federal Defense of Marriage Act.

I have to say I'm immensely surprised that they're going to hear Hollisngworth. The appeals court ruled Prop 8 should be nullified because under the CA constitution once a right has been recognized and conferred upon a class of citizens, that right can not be limited or taken away by referendum. This was a very narrow ruling which was really only applicable to California; there was no federally justiciable question. I posted here at the time how disappointed I was with the appeals court ruling, and that I thought it effectively ended the judicial road for Prop 8.... which was good, imo, but well short of giving the issue the grand scope I think it needs to put it in the rear-view mirror once and for all.

Can they go back and revisit the much broader trial court decision without looking at the appellate ruling? And what, if anything, does granting cert in these cases say about what's on the Court's mind? It's very interesting that they took on both of them.

Hockeynut! wrote:Most of that innovation isn't the type of innovation that will create millions of jobs. And if it does, those jobs will mostly go overseas. Look at Apple. They're one of the most innovative companies in the world (or at least take credit for inventing everything), but their "blue collar" jobs are almost all taken out of the country.

Pretty much every type of physical good can be made at a lower cost in China/Indonesia/India, etc. The US has millions upon millions of low skilled workers who used to be able to make a good living in manufacturing. Those types of jobs are rapidly going away. Where are all of those workers going to go? I think it's naive to think that the US has any type of industry currently or in the pipeline that will provide millions of jobs those kind of family sustaining jobs within the next decade or two.

In fact, I think you could make the argument that many of the best innovations of the last century or so actually inhibit job growth by making manufacturing and production more efficient through automation.

columbia wrote:Correct me if I'm wrong, but raising the debt limit ceiling is to allow for the government to pay for what it has already bought.You can cut up your credit card, but you still have to pay the bill; as it were.

But if VISA raises your limit you don't need to max it out again to where your finance charges put you over your limit. If its raised in conjunction of no new debt and only to pay the interest increases then I guess I'm fine but that has never been the case. We increased it $1.2 trillion last time and, shocker, the deficit last year was $1.2 trillion.

ExPatriatePen wrote:So if I refuse to raise the credit limit, neither of us can spend foolishly????

Sounds like a pretty fine solution to me.

No.

If you refuse to raise the limit:- The U.S. economy grinds to a halt (albeit from not a very high speed) as the billions of dollars spent by the government every day stops flowing;- Stock markets will explode. Literally explode;- International markets will begin to collapse;- Interest rates skyrocket as U.S. credit is downgraded (again);- The government possibly defaults on its debt obligations;

And since the government spends far more than it takes in, not raising the debt means as-near-as-instantaneous cut in government spending of between 40% and 45%. Sure, a big cut in spending is desirable...... but that level of cut - overnight, no less - would lead pretty much immediately to a recession. And such a marked reduction would likely bring about a contraction in the overall economy of upwards of 1.5%.

Remember -- the U.S. credit rating was downgraded in large part because of the uncertainty surrounding the debt ceiling discussion last summer. The worry was that we would not pay our bills, not that we were running up too many of them.

It's NOT sustainable. See Also:Greece

The longer you put this off, the bigger the eventual explosion.

Yes, the Markets will implode, yes a recession will ensue, yes, interest rates will rise, but those issues will 'normalize' when the government subsequently takes the appropriate measures necessary to live within their means.

In fact, charting that clear responsible course would create a boost for the overall economy (even if that boast takes a few years to materialize)

Not taking the appropriate measures will eventually cause a depression worse than ANYTHING we've ever seen before. "Full FAITH and credit" means absolutely nothing when the credit is Trillions and the faith that it will ever be paid back is gone.

Watch the precious metals markets, then the Bond market. When it happens, it'll happen fast, like adding gasoline to the fire.

ExPatriatePen wrote:So if I refuse to raise the credit limit, neither of us can spend foolishly????

Sounds like a pretty fine solution to me.

No.

If you refuse to raise the limit:- The U.S. economy grinds to a halt (albeit from not a very high speed) as the billions of dollars spent by the government every day stops flowing;- Stock markets will explode. Literally explode;- International markets will begin to collapse;- Interest rates skyrocket as U.S. credit is downgraded (again);- The government possibly defaults on its debt obligations;

And since the government spends far more than it takes in, not raising the debt means as-near-as-instantaneous cut in government spending of between 40% and 45%. Sure, a big cut in spending is desirable...... but that level of cut - overnight, no less - would lead pretty much immediately to a recession. And such a marked reduction would likely bring about a contraction in the overall economy of upwards of 1.5%.

Remember -- the U.S. credit rating was downgraded in large part because of the uncertainty surrounding the debt ceiling discussion last summer. The worry was that we would not pay our bills, not that we were running up too many of them.

So what you are saying is that the debt ceiling must be raised to protect the giant bubble we are all living in and protect false paper wealth?

tifosi77 wrote:I completely agree that the current trajectory is unsustainable. Nothing I said should have indicated the contrary.

But this talk of the fiscal cliff is somewhat bemusing...... it's not really a cliff, more of a sidewalk curb. The cliff? That would be default.

Which is exactly why I say, let the fiscal cliff happen, let the economy stagnate, let the markets plunge.

99% of Americans have NO CLUE about what will happen, to them it's just hollow politics. The "Transfer Payments" are still coming, extened Unemployment benefits are still in place, Food Stamp payments are at an all time high, money for ridiculous incentives like the money wasted on Fisker still flows, subsidies to inefficient state and local governments still flow, free gasoline is given away to thousands, without any verification of need, simply because they lived within miles of homes and lives that were disrupted during "Super Storm Sandy".

Meanwhile the typical American is outraged, OUTRAGED, that Mitt Romney would suggest that there's a relationship between the free spending ways of the current administration and the outcome of the recent election.

Former Wyoming Sentator Alan Simpson is right, the older generation of Americans is running up an enormous tab that the younger generation of Americans will have to pay.

Hockeynut! wrote:Most of that innovation isn't the type of innovation that will create millions of jobs. And if it does, those jobs will mostly go overseas. Look at Apple. They're one of the most innovative companies in the world (or at least take credit for inventing everything), but their "blue collar" jobs are almost all taken out of the country.

Pretty much every type of physical good can be made at a lower cost in China/Indonesia/India, etc. The US has millions upon millions of low skilled workers who used to be able to make a good living in manufacturing. Those types of jobs are rapidly going away. Where are all of those workers going to go? I think it's naive to think that the US has any type of industry currently or in the pipeline that will provide millions of jobs those kind of family sustaining jobs within the next decade or two.

The false implicit premise in your argument is "you can only create jobs by having people produce goods." $40 of your Mac comes from China. The other $1160 originates from and stays in the United States. Your Mac would cost $2400 if it was produced in the United States? How's that a good thing? If the third world creates the Mac components as well as the United States, then we would be indifferent between a (A) $2400 Mac or (B) a $1200 Mac and throwing $1200 in the air for people to pick up. That is what the $1,200 American-made surcharge represents---a windfall to those that produce something we don't need (i.e. American parts). So we take the $1,200 and we spend our $1,200 savings on other things. Some of those things are American-produced (e.g. food, Amusement park rides, movie theater tickets, textbooks).

Additionally, the $1,160 of the $1,200 that starts and stays here is spent on those things as well. No matter how you shake it, the availability of cheap labor benefits us immensely. So we innovate. We create new value. And most of that value stays here and is spent on other things, most of which benefits Americans who sell to those that made the money.

tifosi77 wrote:

Hockeynut! wrote:Most of that innovation isn't the type of innovation that will create millions of jobs. And if it does, those jobs will mostly go overseas. Look at Apple. They're one of the most innovative companies in the world (or at least take credit for inventing everything), but their "blue collar" jobs are almost all taken out of the country.

Pretty much every type of physical good can be made at a lower cost in China/Indonesia/India, etc. The US has millions upon millions of low skilled workers who used to be able to make a good living in manufacturing. Those types of jobs are rapidly going away. Where are all of those workers going to go? I think it's naive to think that the US has any type of industry currently or in the pipeline that will provide millions of jobs those kind of family sustaining jobs within the next decade or two.

In fact, I think you could make the argument that many of the best innovations of the last century or so actually inhibit job growth by making manufacturing and production more efficient through automation.

Yeah, same logic I had when they came out with the back hoe. I mean seriously, why don't we just have 100 people use shovels to dig that hole--there would be so many more jobs. Then I kept thinking, if they got rid of shovels, then we could have 1,000 people use spoons to dig the hole--their would be so many more jobs. And then I reached a brilliant conclusion! If they used there bare hands, you could have 10,000 people dig those holes AND 1,000 doctors to fix their hands! And jobs are so good for the economy, so this has to be a brilliant economic theory!